RBI Monetary Policy: Due to high inflation, aggressive monetary policies worldwide, and turmoil in the financial markets, the Reserve Bank of India increased its key lending rate by 50 basis points to 5.90%.
The monetary policy committee (MPC), which is made up of three members from the RBI and three outside members, hiked the key lending rate, also known as the repo rate, by 0.5 percentage points to 5.90 percentage points.
Already up by 140 Basis points since May
In order to reduce domestic retail inflation, which has remained above the RBI’s upper tolerance limit of 6% each month this year, the central bank has already raised the key policy rate by 140 basis points since May, to 5.4%.
Also Read: Money Laundering Case: ED freezes accounts worth over Rs. 9 Crore linked to China
A 50 basis point increase was also made to the rates for the standing deposit facility and the marginal standing facility, bringing them to 5.65 percent and 6.15 percent, respectively.
The annual retail inflation rate, calculated using the consumer price index, rose to 7% last month as a result of an increase in food prices, and it has since remained above the RBI’s statutory target range of 2–6% for eight consecutive months.
Economic activity in India is stable: RBI Governor
According to RBI Governor Shaktikanta Das, price pressures would likely continue high for longer than initially anticipated. Inflation is predicted to remain elevated at around 6% in the second half of this fiscal year.
Also Read: SC Historic Verdict: All Women, Whether Married or Unmarried, are Entitled to Safe & Legal Abortion
While the RBI kept its forecast for inflation at 6.7% for this fiscal year, it reduced its forecast for economic growth for 2022–23 from a prior estimate of 7.2% to 7%.
But the Governor said “economic activity in India remains stable as high frequency data for the September quarter indicates economic activities remain resilient, private consumption was picking up.”
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER.
